A year ago, Google made a secret deal with Mastercard that allows the growing tech monopoly to track the sales of its advertising customers to learn if its marketing resulted in a purchase at a physical store in the U.S.
It’s just the latest revelation about the power of Google growing its database to know more about its customers than they know themselves.
Neither company ever informed MasterCard’s 2 billion customers about the privacy concern.
Alphabet Inc.’s Google and Mastercard Inc. brokered a business partnership during about four years of negotiations, according to four people with knowledge of the deal, three of whom worked on it directly, according to Bloomberg News. The alliance gave Google an unprecedented asset for measuring retail spending, part of the search giant’s strategy to fortify its primary business against onslaughts from Amazon.com Inc. and others.
“People don’t expect what they buy physically in a store to be linked to what they are buying online,” said Christine Bannan, counsel with the advocacy group Electronic Privacy Information Center. “There’s just far too much burden that companies place on consumers and not enough responsibility being taken by companies to inform users what they’re doing and what rights they have.”
Google paid Mastercard millions of dollars for the data, according to two people who worked on the deal, and the companies discussed sharing a portion of the ad revenue, according to one of the people. The people asked not to be identified. An anonymous spokeswoman for Google said there is no revenue sharing agreement with its partners.
“Before we launched this beta product last year, we built a new, double-blind encryption technology that prevents both Google and our partners from viewing our respective users’ personally identifiable information,” the company said in a statement. “We do not have access to any personal information from our partners’ credit and debit cards, nor do we share any personal information with our partners.”
The company said people can opt out of ad tracking using Google’s “Web and App Activity” online console. Inside Google, multiple people raised objections that the service did not have a more obvious way for cardholders to opt out of the tracking, one of the people said.
Seth Eisen, a Mastercard spokesman, also declined to comment specifically on the Google partnership. But he said Mastercard shares transaction trends with merchants and their service providers to help them measure “the effectiveness of their advertising campaigns.” The information, which includes sales volumes and average size of the purchase, is shared only with permission of the merchants, Eisen added.
Last year, when Google announced the service, called “Store Sales Measurement,” the company just said it had access to “approximately 70 percent” of U.S. credit and debit cards through partners, without naming them.
Google has approached other payment companies about the program, according to two people familiar with the conversations, but it is not clear if they finalized similar deals. The people asked to not be identified because they were not authorized to speak about the matter. Google confirmed that the service only applies to people who are logged in to one of its accounts and have not opted out of ad tracking.
Through this program, Google can match these existing user profiles to purchases made in physical stores. The result is powerful: Google knows that people clicked on ads and can now tell advertisers that this activity led to actual store sales.